The rescheduling of Nigeria’s Monetary Policy Committee (MPC) meeting has heightened interest in the potential implications of the rebased Consumer Price Index (CPI). Analysts and financial experts have shared their perspectives on the likely trajectory of interest rates and inflation management in the coming months.
Razia Khan, Managing Director and Chief Economist for Africa and the Middle East at Standard Chartered Bank, believes the Central Bank of Nigeria (CBN) will use inflation data as a basis for maintaining current interest rates. Following the recent 25 basis points (bps) increase to 27.5% in early 2024, she suggests that any premature easing could deter foreign portfolio investors and destabilize Nigeria’s foreign exchange market. She anticipates that the CBN may begin rate cuts in the second half of 2025 if inflation improves faster than expected.
Similarly, Ayodele Akinwunmi, Senior Relationship Manager at FSDH Merchant Bank, notes that if economic stability persists into the second quarter—supported by forex stability and lower commodity prices—the CBN might consider easing monetary policy. He expects the MPC to maintain current rates at the upcoming meeting but sees potential for reductions in the latter half of the year.
Ayodeji Ebo, Managing Director and Chief Business Officer at Optimus by Afrinvest, highlights the challenges the MPC faces in decision-making. He points out that previous rate hikes aimed at stopping inflation, including the November 2024 increase to 27.5%, may have reached their peak. As a result, he predicts the CBN will hold the current Monetary Policy Rate (MPR) to assess the impact of previous adjustments and evaluate the rebased inflation and GDP figures.
Bismarck Rewane, Chief Executive Officer of Financial Derivatives Company, forecasts a slight decline in inflation rates. However, he expects interest rates to remain at 27.5% through February, with a shift toward policy easing by mid-2025. He emphasizes the CBN’s priority on price stability, projecting that interest rates will stay above 20% throughout the year.
Contrasting these views, Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co., anticipates a continued tightening stance. He expects the MPC to further increase the MPR while keeping other economic parameters unchanged.
Meanwhile, JP Morgan projects a 25 bps increase in rates to 27.75%, with a further rise to 28% in the first quarter. The bank expects the MPC to maintain this rate for the rest of the year, as stated in its Emerging Market Frontier Local report.
Monetary policy decisions heavily depend on inflation trends, yet the rebased CPI report—expected at the end of January—remains unpublished by the National Bureau of Statistics (NBS). This delay raises concerns about the availability of key economic indicators ahead of the upcoming MPC meeting, adding another layer of uncertainty to policy deliberations.
